236 posts categorized "business and finance"

05/04/2010

No one knows exactly how much oil is leaking from BP PLC's blown gusher in the Gulf of Mexico, but this much is certain: It's enough to send energy markets higher.

Gasoline prices at the pump, climbing for months, have inched up in recent days as the disaster unfolded. A bigger jump could be in store as the summer driving season and improving global economies keep the pressure on.

"The market is underestimating how high it could go in a short period of time," said Bill Powers, editor of the Powers Energy Investor newsletter in Chicago. "Gasoline prices will go up. We can move a fair amount closer to $4 a gallon by the end of the summer."

05/03/2010

When embryonic stem cells were first hailed as a revolutionary medical breakthrough more than a decade ago, the list of potential cures ran from Alzheimer's and Parkinson's to cancer and heart disease.

Severed spines would be healed, and immune disorders sent into permanent remission.

Then came a decade of political gamesmanship and deeply felt ethical concerns, relentlessly nudging the promising science toward the sideline.

Now, as the BIO International Convention opens Monday in Chicago, hope is rekindling for embryonic stem-cell research. All the possibilities dreamed about long ago may yet come to pass — eventually.

04/29/2010

As the debate over Wall Street's future gets under way in Washington amid high stakes for Chicago's leading exchanges, Arkansas looms large.

Yes, Arkansas.

Ending a three-day standoff, the Senate agreed Wednesday to take up financial reform, including a proposal from Arkansas Democrat Blanche Lincoln that illustrates how much remains up for grabs as lawmakers cobble together an overhaul bill.

Earlier this month, when momentum had started to flag, Lincoln seized the moment with a plan for forcing big banks to spin off their lucrative derivatives business.

Her idea got a boost from this week's hearings on the derivatives trading of Goldman Sachs Group Inc.

Now it's front and center as Congress sets out to reduce the risks — and consequently the returns — at the nation's biggest banks.

Remaking these huge institutions into ultrasafe utilities probably will never happen, and the effort could backfire if bankers take unforeseen new risks to keep up their profits.

Crafting the legislation promises to be devilishly complicated, with lots of potential for unintended consequences.

04/26/2010

Ann Moore spoke for much of her generation earlier this month when she pleaded for human contact, as opposed to digital.

The chief executive of publisher Time Inc. bemoaned the rise of e-mail, text and multimedia messaging at the expense of voice communication, and she touted the advantages of old-fashioned landline telephones.

Speaking to the Chicago Network women's business group, the 59-year-old Moore received enthusiastic applause when she advocated a ban on the "reply to all" e-mail function that clutters inboxes coast to coast. "There's a lot of wasted time and effort in America," she griped.

04/22/2010

Speaking in Chicago shortly after President Barack Obama called on leading bankers to get behind Democratic-led financial reform, Jamie Dimon, the chief executive of JPMorgan Chase & Co., said he's 80 percent on board.

"It's obvious we need to reform our financial system. JPMorgan has supported most of the things that came out," said Dimon, as he accepted an award Thursday from the Executives' Club of Chicago. "We agree with 80 percent. We might be right on the other 20 percent."

Dimon said he supports consumer protection, but not a separate agency as leading Democrats have proposed. And while he's comfortable moving some over-the-counter derivatives into clearinghouses, he wants exemptions that critics have described as gaping loopholes. "It's just not true," Dimon countered.

He warned that public anger about the financial system's federal bailout could translate into bad policy. "It sounds like a lynch mob to me," he said. "I'm hopeful it will all sort out in a rational, reasonable way."

Dimon drew laughs after Illinois Gov. Pat Quinn described him as a "man of the people" who lent money to the state during the worst of the financial crisis.

"I wish the Democrats in Washington would call me a man of the people," Dimon said.

He also said JPMorgan held the Illinois loan on its books longer than it had planned: "We kept it for awhile because nobody would take it off our hands."

The rap against big banks goes like this: They pocketed short-term profits for years, then stuck taxpayers with their long-term losses.

As they emerge from the recession bigger than ever and just as opposed to regulation, the theory goes, they're getting ready to do it again.

From Main Street to Capitol Hill, the "Big Six" have a target on their backs these days. And nobody wears it more proudly than Jamie Dimon.

The chief executive of JPMorgan Chase & Co. is slated to collect an award Thursday from the Executives' Club of Chicago. Rest assured he will say plenty of nice things about big banks — like his.

Having snapped up ex-competitors Bear Stearns Cos. and Washington Mutual Inc., JPMorgan arguably is the best-positioned to take advantage of an economic recovery. But all the Big Six have been staging a comeback lately.

Profits are soaring, thanks in part to federal policies holding down short-term interest rates.

It's a quiet revolution, since many of these same companies see no advantage in bashing the ingredient that sugar increasingly is replacing: corn syrup.

Reading the labels of processed food today, a shopper might wonder whether high-fructose corn syrup makes up the very stuff of the universe. It's seemingly everywhere, from soup and salad dressing to bakery goods — and especially soft drinks.

But corn syrup carries a taint in the marketplace. Some U.S. consumers believe the grain-derived sweetener contributes more to obesity than an equal amount of sugar.

Like golfer Tiger Woods, corn syrup has a team of spin doctors working on its image, and many researchers find nothing particularly bad about it. Some do, however, including a team at Princeton University that found lab rats gained more weight eating corn syrup than sugar.

The study's much-debated details hardly matter. Whatever the facts, the lobbyists at the Corn Refiners Association don't stand a chance in the credibility contest against Princeton, which is bad news for Midwest syrup-makers such as Archer Daniels Midland Co., Cargill Inc. and Corn Products International Inc.

But it stopped short of giving an O.K. for the trading of the organization's planned futures and options on the movie biz. The Commission said it is still "considering" the proposal for box-office contracts, and asked the new exchange to hold off self-certifying new trading products. The Washington, D.C.-based regulator stressed in a statement that it "has not approved the trading of any futures or options related to box office receipts at this time."

California Democratic senators Barbara Boxer and Dianne Feinstein were among lawmakers who expressed concerns about allowing speculators to bet on movies, as did the Motion Picture Association of America.

A spokesman for Media Derivatives Inc., one of two trading ventures seeking approval, has said the purpose of the new markets is "risk transfer and price discovery," not gambling.

04/15/2010

Developer Scott Toberman, who attracted worldwide attention with a plan in the late 1990s to build the world's tallest building in Chicago, was sentenced Thursday to 64 months in prison after pleading guilty to fraud charges last year.

The 54-year-old Toberman admitted last summer that he skimmed money from buildings he was supposed to manage for investors. The indictment accused him of using other people's funds to support a lavish lifestyle.U.S. District Judge Ruben Castillo rejected Toberman's apology to his victims at Thursday's hearing, saying he doesn't see "any real sense of remorse."

The defendant had no financial need for the money he stole, and sought to avoid full responsibility through a "very offensive use of civil litigation," the judge said. "You're just a thief, and not a petty thief."

It was going to be the world's tallest building, a rail-thin monument to cloud-busting.

The guy who wanted to build it at the corner of Dearborn and Madison seemingly came out of nowhere: In the words of Chicago Mayor Richard Daley, the Downstate native was "just a person who no one knew."

For a few months before it fizzled, however, Scott Toberman's grandiose vision gained worldwide attention, seizing the imagination of a city in love with its skyscrapers. Its design influenced Chicago's now-completed Trump International Hotel & Tower, which used the same architect.

Toberman will return to the public spotlight Thursday, when he is scheduled to be sentenced on fraud charges.

Federal guidelines suggest a prison term of roughly five or six years. But the 54-year-old developer's victims have sought a restitution order — and potentially more prison time. His guilty plea covering $2 million in losses, they say, fails to account for an additional $10 million or more stemming from the Trump-wannabe's criminal conduct, an assertion the defendant disputes.

Toberman admitted last summer that he skimmed money from buildings he was supposed to manage on behalf of investors, including 11 S. LaSalle, 250 S. Wacker and 18-28 S. Michigan. The indictment accused him of using other people's funds to support a lavish lifestyle, complete with a million-dollar wine collection.

He had "an extremely strong personality," his lawyer wrote in a recent court document intended to soften his sentence. A scorched-earth legal battle with his victims had so clouded his judgment that he delayed pleading guilty until the eve of his trial, the filing said: "Moral right and wrong no longer had meaning for him."

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Please join in the conversation about business in Chicago and beyond. This is the spot to vent, brainstorm, share your perspective and learn something new about how we work and live. It focuses on what’s happening in the city, of course. But given the diversity of Chicago commerce, almost anything could be relevant – anything with a $ sign, that is.

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